The Importance of Adding a Data Strategy to Your Business Strategy
A business strategy is something that is considered sacred by most companies. Offsite meetings with top executives are held to prepare and discuss the strategy. The business strategy usually goes through several iterations before it is presented to the Board of Directors for review and approval. Sales are discussed. Marketing plans are floated. Production/Purchasing is scheduled. IT gets new hardware and software. Data is…
That’s right, data is probably not even mentioned. At best its considered part of IT. A data strategy is considered an oxymoron. But next to the people in your organization, data is your most important asset. Data touches every aspect of your business – sales, marketing, production, purchasing, etc. Everything is driven by data. How much did we sale? What is our expected response rate? How many pieces of part B do we need to buy? Ironically, without your data, you won’t know if your business strategy is successful or on track. Then why do most companies tend to treat data like a rented mule?
People tend to only become aware of data when there is a problem. But there are many hidden costs associated with poor data that could be costing you money or opportunities right now, such as revenue leakage, poor customer service and production losses and delays.
A data strategy is not just about the physical managing of the data. It’s really about making sure your data can deliver the right information, in the right hands, at the right time, to enable your organization to make the right decision.
A data strategy, sometimes called data stewardship, has 4 components:
- Management: which is the physical aspect of handling data. This component includes the hardware and software technology, but also the processes, both people and machine involved in managing the data.
- Quality: providing current, accurate and consistent information whenever and wherever the data is accessed.
- Business Intelligence: utilizing the data to yield better, more complete and more useable information. This is what some have called, putting the information back into information technology.
- Security: controlling access to the data to ensure that those who are supposed to access the data can and those that aren’t supposed to access it can’t.
Of course, the common response when this topic is discussed is, “But I already have a data warehouse. Why do I need a data strategy?” The data warehouse is only as good as the data that is in it. If you don’t have the right data or can produce the right business intelligence when needed, all you have done is put all your data in on place. It’s like putting a dress on a pig – it’s still a pig.
A sound data strategy will enable your organization to deliver data that is current, consistent and accurate whenever it is used or accessed. This leads to improved business intelligence and better customer service.
So what should you do today? Like any asset, you need to inventory it. You need to determine what data your organization has, what are the sources of this data, i.e., internal departments versus external suppliers or vendors, who handles the data in your organization and what is the final state of this data after any manipulation.
A data inventory should be accompanied by a data assessment, to determine where the weaknesses in your organization are that could impact achieving the full potential from your data. Additionally, this is a process that must be undertaken jointly by IT and the business people. IT knows about where the data is “buried” and the business people know their information needs. Additionally, this is not a project you can assign to the mail clerk or other entry-level person. The person in charge of this should be at a senior level with enough influence to get IT and the business people to work together.